An Exploratory Spatial Analysis of Access to Physical and Digital Retail Banking Channels in the UK

Date/heure
14 novembre 2019
10:45 - 11:45

Oratrice ou orateur
Andrea Sonea

Catégorie d'évènement
Séminaire Probabilités et Statistique


Résumé

Having access to one’s own money is facilitated by banking channels, namely; branches, ATMs, call centres, online and mobile banking as well as the post office. Whilst banks provide channels, individual experiences of access are not homogenous. Indeed, socio-economic and geographical considerations lead to vastly varied access. With digital banking having permeated society, individuals across the UK use physical network points of access – such as branches or ATMs – less than previously. As such, the cost of running such network points have become relatively more expensive and banks have started retreating their physical access point presence. Whilst this has been anecdotally reported in mainstream media, there has been no quantitative analysis on the impact of said closures.

As such, we propose a simple methodology to identify critical points of access. Our hope is that regulators and industry players can then use this framework to ascertain integral nodes the the UK’s banking channel network. The framework considers all channels available to an individual, in respect to their place of residence. The distance to the closest point of access is calculated as well as the impact of the closure of that access point. The impact is measured as the difference in distance between the closest and second-closest point of access, reflecting an increase in the difficulty of banking access

Exploratory spatial data analysis at both UK and regional level showed strong spatial patterns of the points of access to banking ; significant rural/urban clusters could be identified as well as a North/South divide which we need to explore further. No significant association was found between distance metrics and income and employment. Despite data limitations, the indicators used in this study can be used to identify areas vulnerable to the closure of the last points of access. We learned that the majority of the infrastructure for access is no longer operated by banks. In this context, it becomes even more critical to maintain and monitor a dynamic map of access and therefore we recommend more transparency on location, capability and capacity of the points of access from all players, as well as on broadband availability and quality from telecom providers. Retail banking access should be treated as a joined-up system so that territorial coverage can be ensured, such that entire communities are not accidentally excluded from participation in the economy.